Notification requirements of tax arrangements

EU Directive 2018/882/EU (DAC6) requires companies and intermediaries to report cross-border tax arrangements to the authorities.

DAC6 - Reporting obligation for cross-border tax arrangements

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The adoption of EU Directive 2018/882/EU (DAC6) on 25 May 2018 has a major impact on the exchange of information in the EU - even before it has to be applied in all Member States from July 2020. This is because all reportable tax arrangements incurred since 25 June 2018 must then be reported retroactively within a two-month period. The EU states still have until the end of 2019 to transpose the directive into national law. While discussions are still ongoing in Germany, a reporting obligation was already introduced in Poland, for example, in January 2019.

The directive defines reportable tax arrangements on the basis of fixed criteria (so-called hallmarks). These include not only complex arrangements by intermediaries such as banks or advisors, but also 'inconspicuous' models such as simple debt deposits or other everyday transactions. Therefore, companies in particular are under pressure to review internal models and report them if necessary.

The following challenges arise from the reporting obligation:

  • The foreseeable heterogeneous implementation into the national law of the EU states has not yet taken place. Concretising administrative opinions may only be issued when reports actually have to be submitted.
  • Data subject to reporting requirements are not readily available in systems (e.g. value of design).
  • Responsibilities between tax, compliance and business units need to be clarified.
    Reporting obligations should be fulfilled as efficiently as possible - a tension arises between current business, reputation as well as possible sanctions.
  • Whether you are a company or an intermediary, KPMG supports you in mastering these challenges with an advisory approach tailored to your individual requirements.
  • Feel free to contact us.